Taiwan Overview

Members can click here to download the PowerPoint presentation given to the Committee by Director General Owen Hsieh of the Taipei Economic and Cultural Office

 

About Taiwan: 

Taiwan is an island in East Asia. Taiwan is bordered on the west by the Taiwan Strait, which separates the island from mainland China, on the north by the East China Sea, on the east by the Pacific Ocean, and on the south by the South China Sea. The government on Taiwan also administers the P’enghu Islands (Pescadores), the Chinmen Islands (Quemoy Islands) offshore from the mainland city of Xiamen, and the Matsu Islands offshore from Fuzhou, the capital of Fujian Province.

The government that administers Taiwan calls itself the Republic of China. Leaders of the government moved to the island from the Chinese mainland in 1949, when Communist armies gained control of the mainland and established the People’s Republic of China (PRC). The government on Taiwan recognizes the mainland city of Nanjing (spelled Nanking in Taiwan) as its official capital, and designates Taiwan’s largest city of Taipei as its temporary capital. The PRC does not recognize the government on Taiwan and considers the island a renegade province. Taiwan recognizes that the Communist government rules the Chinese mainland while the republican government rules Taiwan.

Economy:

Taiwan’s economic policies have been extremely successful. In the mid-1990s per capita gross national product (GNP) was about $11,600, compared to $1,100 in the early 1950s (adjusted for inflation). Because its economy has achieved such rapid growth and it boasts one of the world’s highest standards of living, Taiwan is one of Asia’s “Four Tigers,” along with Hong Kong, Singapore, and South Korea. Economists also classify Taiwan as a Newly Industrializing Economy (NIE), an imprecise term that sometimes includes the Four Tigers, Malaysia, the Philippines, Indonesia, Vietnam, and China. In the early 1990s Taiwan had a gross domestic product (GDP) of $216.5 billion.

Taiwan had about 9 million people in the workforce in the early 1990s. About one-tenth of the people were employed in the primary sector, which includes agriculture, forestry, fishing, and mining. The secondary economic sector, which involves processing or combining raw materials into new products, employed nearly two-fifths of the workforce. Tertiary activities, or service industries such as retail, banking, and government employment, employed nearly half of Taiwan’s working people.

Services:

Services account for about 60 percent of the GDP. The most important services are finance, insurance, and business services. Next in importance are wholesale and retail trade, restaurants, and hotels, followed by government services. Tourism is significant, with 3.4 million tourists visiting Taiwan in 2005. The majority of tourists are Japanese, although many Southeast Asians, North Americans, and Europeans also visit Taiwan. Among the major tourist attractions are the National Palace Museum, Yangmingshan National Park, Sun Moon Lake, Mount Ali, Cheng Ching Lake, Kenting National Park, and Taipei 101, the world’s tallest building. Located in Taipei, the 101-story structure rises 509 m (1,671 ft) and was designed to resemble a bamboo stem.

Manufacturing:

Manufacturing accounts for 37 percent of the GDP. Chief manufactured products include chemicals, petrochemicals, electrical and electronic machinery, basic metals, paper products, and nonmetallic mineral products. The importance of labor-intensive products, such as garments, leather, fur, and bamboo and wood products, is declining.

Agriculture, forestry, and fishing:

Agriculture, forestry, and fishing account for less than 4 percent of the GDP. Taiwan’s chief agricultural areas are located on the island’s fertile western plains and basins. Rice is the principal food crop. Other major crops include sweet potatoes, citrus fruits, sugarcane, watermelons, pineapples, bananas, peanuts, mushrooms, tea, asparagus, and soybeans. Pigs, chickens, ducks, cattle, and goats are among the livestock raised.

Approximately 55 percent of the land is forested, but timber production is insufficient to meet domestic demand. The main timbers are oak, cedar, hemlock, bamboo, and rattan. Onshore and deep-sea fishing yield about 80 percent of the total catch; the remainder comes from along the coast and from cultivated ponds. Mackerel and tuna are the leading marine species caught.

Energy:

More than 90 percent of Taiwan’s energy must be imported. Most energy is derived from thermal plants, although nuclear power is also significant. The only domestic source of energy is hydroelectricity. Among the major hydroelectric facilities are those tapping the Choshui, Shimen, and Tahan rivers.

In 2003 Taiwan’s exports totaled U.S.$150.6 billion; imports cost U.S.$127.2 billion. Exports consistently exceed imports, giving Taiwan one of the world’s largest trade surpluses. The major exports are machinery, electrical and electronic products, and textiles. Taiwan’s largest export trading partner is the United States, followed by Hong Kong, Japan, Singapore, Germany, Malaysia, and South Korea. More than 70 percent of imports are agricultural and industrial raw materials used by Taiwan’s manufacturing industry to create finished products. Japan supplies the majority of imports, followed closely by the United States. Taiwan’s trade with the Chinese mainland grew from about $78 million in 1979 to more than $9 billion in 1994, although Taiwan’s Ministry of Economic Affairs restricts trade with the mainland for the purpose of national security.

Trade:

In 2003 Taiwan’s exports totaled U.S.$150.6 billion; imports cost U.S.$127.2 billion. Exports consistently exceed imports, giving Taiwan one of the world’s largest trade surpluses. The major exports are machinery, electrical and electronic products, and textiles. Taiwan’s largest export trading partner is the United States, followed by Hong Kong, Japan, Singapore, Germany, Malaysia, and South Korea. More than 70 percent of imports are agricultural and industrial raw materials used by Taiwan’s manufacturing industry to create finished products. Japan supplies the majority of imports, followed closely by the United States. Taiwan’s trade with the Chinese mainland grew from about $78 million in 1979 to more than $9 billion in 1994, although Taiwan’s Ministry of Economic Affairs restricts trade with the mainland for the purpose of national security.

Currency and Banking:

Taiwan’s basic unit of currency is the New Taiwan dollar. The bank of issue is the Bank of Taiwan. While Taiwan has permitted private banking since the 1990s, most banks remain government owned or controlled.

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